0330 161 1234
The Court of Appeal has confirmed that the English courts do have jurisdiction over a claim seeking recovery of sums paid for the purchase of a property in Egypt which did not complete. The claim had depended on the principles of law of contract and restitution (personal obligations allegedly owed by the defendant) and had not depended for its existence on the law of Egypt as to ownership of property.
Hamed v Stevens serves as a useful reminder of the scope of the rule in Mocambique (British South Africa Co v Companhia de Mocambique [1893] A.C. 602). Whilst rights in rem will usually benefit from exclusive jurisdiction, you should ensure that you properly analyse the facts to ascertain whether the rights and disputes are properly characterised as rights in relation to land. If, as here, the claim does not depend for its existence on the law of a foreign country as to ownership of property, it may well be possible to argue that the dispute relates to rights in personam and jurisdiction may well therefore be capable of establishment.
The proceedings concerned an allegation by the claimant that he had an agreement with the defendant for the purchase of an apartment in Egypt but, having transferred the purchase price to the defendant on a repayable on demand basis, the defendant had failed to complete the transaction and had failed to return the purchase price.
The claimant issued proceedings seeking the return of the sums paid whilst the defendant submitted that he had had no dealings with the claimant and that, if any arrangement had been made for the sale of the apartment, that had been through a company of which the defendant had had no control.
The defendant further stated that there had previously been a sale of the property to the claimant's partner, but the defendant had merely acted as an agent in that transaction and the sale had been completed, the claimant's partner had taken possession, but the property had since been re-sold to a subsequent purchaser.
The defendant challenged the proceedings on the ground of jurisdiction. He sought a declaration that the court did not have jurisdiction over the subject matter of the proceedings since the claim raised a disputed question of title to foreign land.
The judge held that it had been impossible to characterise the claim as one relating to title to foreign land since it had been agreed that the alleged purchase had not been completed and the property had been sold to a subsequent purchaser, and the claimant had not been raising a claim as owner of the property.
The judge held that the English court could order specific performance of an agreement to sell foreign land, and whilst that had not been the case here, he saw no distinction in principle between seeking completion by specific performance and seeking instead recovery of the purchase price of property, the sale of which had not been completed.
Further, he held that no judgment would have had an effect on title and would not have involved the court adjudicating upon a disputed claim of title.
Accordingly, he dismissed the declaratory relief sought by the defendant. The defendant appealed.
It was settled law that the underpinning of the Mocambique rule had been eroded. All that was left of the Mocambique rule, except to the extent that it was modified by the Brussels I Regulation, was that there was no jurisdiction in proceedings for infringement of rights in foreign land where the proceedings were principally concerned with a question of the title to, or the right to possession of, foreign property. It had nevertheless been settled law that, before the Mocambique rule could apply, the proceedings had to raise directly the issue of title to foreign land.
These proceedings were not for the determination of the title to or the right to possession of land situated outside England; rather, any question of where title in the property was vested at any particular time would be purely incidental in proceedings which were principally concerned with questions of contractual performance and rights arising from alleged non-performance.
The court would not be required to adjudicate on a current disputed claim of title, it being common ground that the title to the property had been vested in a subsequent purchaser. As a result, there was no question of a judgment in the instant proceedings having any effect on title to land situated abroad.
Any remedy which might be awarded to the claimant would be a personal remedy for the recovery of money from the defendant, and there was no basis for the suggestion by the defendant that any determination by the English courts of whether the original transaction had been completed or not might affect the validity of subsequent transactions in Egypt and the validity of the ownership of the current owner.
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